1985 Legislative Session: 3rd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

FRIDAY, JUNE 7, 1985

Morning Sitting

[ Page

6513 ]

CONTENTS

Private Members' Statements

Atlin constituency. Mr. Passarell –– 6513

Mr. Reid

Mr. Williams

Mr. Barnes

New ferry route proposal. Mr. Davis –– 6514

Mr. Stupich

Mr. Cocke

Math assessment tests. Mr. Rose –– 6516

Mr. Veitch

Mrs. Wallace

Agricultural land reserve. Mr. Kempf –– 6518

Ms. Sanford

Mr. Stupich

Committee of Supply: Ministry of Energy, Mines and Petroleum Resources estimates.

(Hon. Mr. Rogers)

On vote 22: minister's office –– 6519

Mr. Lockstead

Mr. D'Arcy

Mr. Davis

Mrs. Wallace

Appendix –– 6532

FRIDAY, JUNE 7, 1985

The House met at 10:06 a.m.

Prayers.

[Mr. Strachan in the chair.]

Orders of the Day

Private Members' Statements

ATLIN CONSTITUENCY

MR. PASSARELL: Mr. Speaker, often in this House we,

unfortunately, speak of negative issues in regard to our communities.

Today I'd like to speak of some of the positive issues in the far north

and do a little travelogue on what the north is all about.

The first community I'd like to talk about is Mile 48 –– I doubt if

many people in the House or in the gallery have heard of Mile 48. Only

about ten people live there. It's on the Haines Road, a couple of

hundred miles west of Vancouver. Some of the largest mountains in North

America, the St. Elias Range, are up there. There are a number of

trappers, probably the major employment in the far north. Very little

service is provided by any level of government. There's no school and

no medical health station. There's very little there.

If you're traveling farther to the east you have to go up along the

Alaska Highway, past Whitehorse, and then you turn south down to the

next community in the constituency, which is Atlin. At the turn of the

century Atlin was the third largest community in the whole province of

British Columbia. It's situated on the largest natural lake in the

province, and is also in the Guinness Book of World Records. It has the

tallest mountain in the entire world out of a fresh water lake –– 6,500

feet high that comes out of Atlin Lake. Tourism is a major industry in

the community of Atlin, where I make my home, and the tourism potential

can and should be used further by this government, or by any government

in this country.

The other major industry in the community of Atlin is placer mining,

which employs usually less than ten people. There are many one-man

operations on the creeks surrounding the community of Atlin.

Then you go back up onto the Alaska Highway and drive another 350 miles to

the east, and you come to the next community in my constituency, Lower Post,

situated where the Laird and Dease rivers meet. It used to be a major Hudson

Bay Company trading post at the turn of the century for gold miners going into

the far north. Then you go back up to Watson Lake and turn south down Highway

37. Living along both sides of the road for the first 60 miles are many native

trappers. There are places like Blue River, Table Mountain. You come to the

next community, a place called Good Hope Lake, where I used to live. I was a

school teacher there prior to the election of 1979. Six miles past Good Hope

Lake you come to a community called Centreville. There used to be 10,000 people

living at Centreville; now there are only two individuals, Mr. and Mrs. Zimick.

George has been mining that area for about 20 years now. Twenty miles south

of Centreville is the asbestos capital of the west, Cassiar, which is a company

town. At the turn of the century that area had one of the largest nuggets ever

found in the world –– 73 ounces. The Centreville nugget was found

in that area.

Interjection.

MR. PASSARELL: That's right. The minister knows that one.

Ninety miles south of Cassiar is a community called Dease Lake,

which has the potential to be the economic hub of the far north. It's

also the jade capital in British Columbia. Turn west, go along the

Stikine, on the ridge, the canyon, the Grand Canyon of Canada as it's

called, where B.C. Hydro at one time intended to build a massive hydro

development, and go into the community of Telegraph Creek. This is

where the Tahltan nation live.

A few miles past Telegraph Creek is the community of Glenora, famous

at the turn of the century as one of the stopping-off spots for the

miners going north. You travel back on Highway 37, go across the

Stikine River, and enter the community of Iskut, a native community.

To the west is the famous volcano, Mount Edziza. To the east is the

Klappan coal project, which has the potential of being an economic

boost in the far north. Past the communities of Tatogga Lake and Bob

Quinn Lake, turn off at Meziadin Junction, go west and you go to the

community of Stewart, the only municipality in the Atlin constituency,

the most northerly ice-free port in British Columbia. It is a terminus

of shipments of asbestos and the Klappan coal, shipments to the world.

This area has a great potential for economic development.

Further down Highway 37, you go into the Nass, past the forest

company community of Nass Camp and then into the Nishga area, whose

largest community is New Aiyansh. Going further west nine miles, you

have to cross the Nass River on a swinging bridge, and you go into the

community of Canyon City. Thirty miles past that is the community of

Greenville, and that's where the road ends. Finally, the last community

in my constituency is further at the terminus of the Nass River, and

that's the community of Kincolith.

[10:15]

We who live up north do it by choice. We face adversities of gravel

roads, record snowfalls and minus 50 degree temperatures in winter. In

summer, blackflies and no-see-ums hound us. But with our jobs and our

taxes and our lifestyles, we make Canada a better place to live. We are

the last frontier in this province and proud of the contributions that

we give from the far north to the rest of the community called Canada.

That's why we are the strong and free north.

MR. REID: Mr. Speaker, I wanted to comment for a moment on

the strong north. Some of the members of caucus had the opportunity

last fall of visiting that great area, and I want to compliment the

member from that area, especially with the announcement which was made

yesterday in relation to the Klappan coal project potential for the

Klappan mine up there. What it will have is an initiative and potential

for the little town of Stewart.

Mr. Speaker, I wanted to commend the member from that area for the

enthusiasm that he's generated in that particular community up there. I

wish them the very best of luck, because they deserve some help. If

this mine and the anthracite development up there comes off — and there

is a good likelihood it will — they certainly deserve the opportunity

for the development of that potential. The spirit in all

[ Page 6514 ]

those areas up there.... The Nass camp area and the

Indian developments and Atlin certainly deserve a break, being the area

of this province which is strong, north and free.

MR. WILLIAMS: I'd like to endorse the comments of the man

from the deep south there. Those of us who have been in the northwest

of the province appreciate the grandeur of it. I had the opportunity

over a decade ago to spend some time in that riding and helicopter much

of it. To go down the grand canyon of the Stikine is truly to see one

of the great wonders of the world. It's a blessing that B.C. Hydro has

its problem of oversupply, because I think in the future it will be

seen as one of the great natural monuments in the world.

Of course, the people of the region are a tremendous strength. To

spend some time with the people in Glenora or Telegraph Creek or Dease

Lake or some of the other places is a wonderful opportunity for the

people of British Columbia. So I endorse what the member for Atlin

says. It's a unique, special part of British Columbia and it is still

the frontier.

I'd just like to make a minor aside about Klappan, however. I did

land at Klappan and we did look at the coal in the area and so on, but

I'd just like the government to note that the same geologists who

worked on northeast coal were involved in Klappan, so before you build

a railway and before you build another highway, maybe you could have a

second look at it.

MR. BARNES: I don't know how much time I have, Mr. Speaker. I

just wanted to say that I had the opportunity to travel on several

occasions with the member for Atlin, and there's just one little point

that I wanted to make. He forgot to mention that near the community of

Stewart is a little part of the United States called Hyder, Alaska.

That's a place that all members of this House should visit some time.

They have a little outlet there for a refreshment called Everclear.

It's a product of about 190-proof spirit from some place in California

that's available in Hyder. When you go there, they'll give you the

opportunity to have a one- or two-ounce drink, with a glass of water as

a chaser. If you're able to drink this stuff without a break, you get

it free; otherwise, you buy a round for the House. Anyway, I took a

drink of this stuff and was unable to respond for about half an hour. I

recall asking the member to please get me a sandwich so I could soothe

my throat. I don't recommend that anyone going to Hyder, Alaska, take

them up on that offer.

Otherwise, Atlin is a beautiful place, and certainly quite a

contrast to Vancouver Centre, where I can get across the riding in

about 10 or 15 minutes. We rode all day long just to get halfway across

that country. It takes days to go across Atlin. It's good that we have

a person who can speak so eloquently about that area. I think that

we've all become enriched and felt much more enlightened about the

expanses in British Columbia and those areas that normally we don't

hear about. So I want to congratulate the member on doing a very good

job, and for bringing information that ordinarily wouldn't be available

to us about his constituency.

MR. PASSARELL: Everyone is so nice today, and it's not even my birthday. It must be "Thank God it's Friday," or something of that nature.

They call it a rebuttal. I don't really have anything to rebut. Everything has been so cool this morning.

What I'd like to do is extend an invitation for all members of the

Legislature to come up north, and we'll get some snakebite and have a

good time for once.

NEW FERRY ROUTE PROPOSAL

MR. DAVIS: We need a new crossing over the Strait of Georgia.

We need a new ferry link from Point Grey to Gabriola Island. We need a

short crossing, a timesaver, an energy-saver. We need a new ferry

route, one which will improve the economics of serving Vancouver Island

on the one hand, and minimize disruption caused by car and truck

traffic in the greater Vancouver area on the other. I don't say build

this shorter, better crossing right away. I say begin planning for it

now; be ready to build it in the early 1990s. Plan ahead for terminals

on Wreck Beach, south of the UBC campus at Point Grey at the western

end, and an attractive terminal at the eastern end of Gabriola Island,

south of Nanaimo city limits on the other.

Have the Ministry of Transportation and Highways start its work now.

Consult with the citizens in municipalities most affected at an early

date. Work out their differences; make changes and have a

well-conceived design ready when the bulldozers move in and the paving

companies gear up five or six years from now.

First, as to expenses. The entire link ferry project, including both

terminals, connecting roadways and two short bridges at the Gabriola

end, will cost approximately $150 million at today's dollar value.

That's what it cost to build the dome at B.C. Place; that's about the

same dollar amount as the proposed four-lane highway connector from

Merritt to Peachland in the Okanagan.

It's one-third of the projected cost of the Coquihalla Highway from

Hope to Kamloops. It's one-fifth of the cost of building a natural gas

pipeline from the mainland to Vancouver Island. It's one-eighth of the

cost of building the big hydroelectric power line from the Sunshine

Coast to Courtenay, north of Nanaimo. It's a drop in the bucket

compared to the cost of building the Tumbler Ridge rail line in

northeastern B.C., light rail rapid transit through Vancouver, Burnaby

and New Westminster, and Expo 86.

It's a tiny investment compared to double-tracking the CNR through

B.C., or the CPR tunnelling, once again, through the Rockies. It's a

lesser investment with comparable results as far as the public is

concerned, improving the lot of similar numbers of people at a fraction

of the cost of these other projects. It has, in other words, a

favourable cost-benefit ratio.

It's in the first rank insofar as value generated per dollar

invested is concerned. It's perhaps number one from a transportation

and economics point of view. There are direct savings and there are

indirect savings. The direct savings will turn up on B.C. Ferries

financial statements. The Point Grey to Gabriola crossing would take

three-quarters of an hour sailing time. Departures would be on the hour

every hour. Every second hour the same vessel would be back loading,

either at the Point Grey terminal or the Gabriola Island terminal. This

means several things. It means that one vessel can do the job that two

do today on our two main routes, Tsawwassen to Swartz Bay and Horseshoe

Bay to downtown Nanaimo. It means that we don't have to add more

vessels to our fleet for a long time. It means a savings in vessel

construction. It also means that we don't require the same services on

board — the same dining rooms, the same large

[ Page

6515 ]

crews, the same high operating costs. B.C. Ferries operating expenses per vehicle

or passenger carried will go down accordingly. To put it another way, we double

our vessel capacity on the Strait of Georgia without investing another cent.

We reduce crew sizes. We deliver passengers and freight-carrying trucks across

the Strait of Georgia for a half or at most 60 percent of the unit cost we are

experiencing today.

What about the user, the customer, the traveller, the trucker using

the ferry system? He or she doesn't have to go north across Burrard

Inlet, along the North Shore to Horseshoe Bay, spend two hours on the

water and end up in congested downtown Nanaimo. The time will be more

than cut in half. It may be cut by as much as two-thirds. Crowding on

our First and Second Narrows bridges will be reduced. The jam-up in

Horseshoe Bay will be avoided. Time and energy will be saved. Clearly

the user benefits considerably from a new one-hour ferry link from

Point Grey to Gabriola Island.

People living on the North Shore have to be for it. People going

north to Squamish and Whistler have to be for it. Anyone on Vancouver

Island destined for the Vancouver International Airport, downtown

Vancouver, Burnaby, New Westminster and Richmond have to be for it. The

same reasoning applies vice versa to people originating in those areas

and headed for destinations north of Duncan on Vancouver Island. It's a

big time-saver and energy-saver for all of them. There are hundreds of

millions of dollars involved if we look ahead 20 or 30 years and focus

on this new connection to the Island.

Environmentally, its pluses outweigh its minuses. By departing from

Point Grey we avoid the ecology of most of the Fraser River delta.

Building a terminal in the vicinity of Wreck Beach needn't upset our

summertime skinny-dippers unduly, and it will tidy up what has been

essentially a messy log-booming ground at the mouth of the north arm of

the Fraser River. It's a sort of no-man's-land today. Properly planned,

this new takeoff point can be enjoyed by thousands of travellers daily.

Why reserve it for the few, for a lot of logs and the occasional

visitor?

Access through Vancouver — this is a challenge. There are many

arteries, however, running east-west through Vancouver South, Kitsilano

and the Dunbar area of Point Grey: Broadway, King Edward, 41st and

Marine Drive. There's a new four-lane highway running along the south

extremity of the University Endowment Lands, dropping down to Wreck

Beach. It's entirely within lands under provincial jurisdiction. The

province would encounter fewer difficulties there than had it to build

an eastern access to the new link through municipal territories.

At the Gabriola or Vancouver Island end, there's a particular

problem. Local opinion is divided about fifty-fifty re the desirability

of a ferry terminal being built at or close to the Island's eastern

extremity. It's a favourite boating area; it's a beautiful cottage

area. However, a short crossing to Vancouver Island would make Gabriola

a prime residential district. Careful planning, routing and zoning are

imperative. That's another reason why the new crossing can't be rushed,

why considerable time is needed. Planning must be carefully done.

I'll conclude with the rest of my remarks later.

MR. STUPICH: I suppose my first comment must be one of disappointment

that the Minister of Highways (Hon. A. Fraser) is not here to respond this morning.

Certainly this is an issue that has been discussed for many years. When I first

ran some 36 years ago, one of the first questions put to me by constituents

from Gabriola Island was: would I support the proposed bridge between Gabriola

and Vancouver Island. They weren't thinking about a third crossing at that

time. Over the years I have supported it.

[10:30]

However, as I listen to the member this morning, and as I think

about the problems, I wonder whether it isn't the same sort of

technocratic approach to a problem as was presented to us by the

current Minister of Universities, Science and Communications (Hon. Mr.

McGeer) when he proposed an underwater tunnel between the mainland and

Vancouver Island.

I don't think it's enough to look at the problem of transportation

between the mainland and the Island.... Certainly there was a problem a

few years ago. But with the years of experience we've had under the

Social Credit administration, when the economy has been damaged to the

extent that the present ferries are more than adequate to handle the

traffic, we have plenty of time to study the possible solutions before

rushing into anything. And the member did recommend that study.

The point that he talked about on Gabriola Island, the eastern

extremity, was examined when the NDP were in office. With the advice of

the ferry captains in particular, we moved away from it because of the

small islands in that area and the navigational difficulties. The ferry

captains, I believe, unanimously recommended some other point, if there

were going to be a ferry crossing between Gabriola and the mainland.

[Mr. Ree in the chair.]

I would certainly endorse what the member has had to say with

respect to study. Let's study not just the effects on Vancouver but

also the effects on and around Gabriola as well — on the boating

fraternity, and what that kind of traffic would do to that recreational

area. Of course, we should also study the effects on Vancouver Island —

the major relocation of roads and what it would do to that part of

Vancouver Island which would be subjected to the heavy traffic that

would be redirected from other terminals. Certainly there is no need to

rush into it. There will be no need for a third crossing until

something happens to drastically change the economy in British Columbia.

MR. COCKE: Mr. Speaker, I'm not particularly familiar with

the other side — that is, the Gabriola-Nanaimo area and what access

there might be. Incidentally, I feel that this kind of recommendation

is refreshing when you compare it to the recommendation of the minister

of science and technology, who was talking about a tunnel from the

mainland to Vancouver Island. In my opinion, as my colleague says, it's

tunnel vision.

It does make a lot of sense. But there is an alternative to the West

Point Grey terminus. That's Iona Island. As a matter of fact, that has

been studied a good deal. The reason Iona Island might be looked at as

part of the study is that as we grow, as the lower mainland grows, the

population is naturally going to be further and further east. To access

West Point Grey from, say, New Westminster or Surrey, or whatever,

would be a great deal more difficult than it would be to

[ Page 6516 ]

access Iona Island, particularly now with the new bridges and other things going on in terms of east-west links.

I agree with my colleague from Nanaimo that this is something in the

future, but I also think that another link to the Island is eventually

going to have to happen. The Island is growing. The Island is a very

desirable place to be — to holiday or to live. I think that we should

have the kind of access and egress that makes us a free-flowing

community all over British Columbia.

Hopefully, too, consideration will be given at that point to saving

even more money, and that's by using natural gas to power the ferries.

I really think that ultimately all the ferries should go on that

system. I recognize that there are some problems now in terms of the

dangers, but I'm quite sure that can be taken care of.

MR. DAVIS: If there's anything new in what I'm saying today,

it's only that I'm recommending that Point Grey be the jumping-off

point. I would see traffic that originates in Vancouver city, in

Burnaby and, perhaps to some extent, to the east using the crossing

intensively. Anyone originating in the United States or the southern

interior, or indeed in the southern part of Surrey and so on, might

well go via Tsawwassen. If there were a terminal on Gabriola Island,

there could be a ferry run north, so that traffic would substantially

bypass the congested areas of downtown Vancouver, etc.

Iona Island has often been mentioned in the past, but Iona is linked

to Sea Island. First, that's federal. Then there is the sewage outlet

problem. It involves the municipality of Richmond. It involves

decisions on a major highway artery onto Sea Island, across Sea Island

and onto Iona Island.

Whereas Point Grey has street and highway

linkages right through to at least the Wreck Beach area. So the

infrastructure on the western end of this link, on the mainland side,

would be much less expensive, and it would really serve substantially

Vancouver to Vancouver Island. The up-country traffic and border

traffic would perhaps go via Tsawwassen to Gabriola.

I would also like to see the eastern terminal — I'll call it the

Point Grey terminal — as far as possible from the Fraser estuary; a

minimum environmental impact, in other words.

Again, I'm advocating serious study now, not construction now. But I

think another crossing is needed. I believe that the economics of a

much shorter crossing, a one-hour crossing, are already compelling.

MATH ASSESSMENT TESTS

MR. ROSE: May I say that I am pleased that the parliamentary

secretary to the Minister of Education is here today to respond to my

questions. When this rule was first drafted, the idea was that the

minister would respond, and I'm sorry that ministers don't take greater

opportunity to respond to these things. I think it spoils the whole

rule. Mr. Speaker, I know that I'm a little bit out of order, but it's

difficult with some of these for a minister to respond. How would you

respond to a title, "Our True North Strong and Free"?

On the other hand, mine is a very specific one; it has to do with

the math assessment tests going on currently in the schools of British

Columbia. I think that when you have to file these things on Tuesday,

that should be ample time for the department to prepare a response. I

regret it, and it makes the rule flounder, I think, and I'm glad my

colleague, who is on the rules committee, is sitting there listening to

my complaints. I know he'll do something about it; especially if it

comes to a Health matter, he'll be here.

Mr. Speaker, there was a little story in this morning's paper

entitled, "Taking Sex Out of Math." It was a very sexy headline. It

went on to say, though, that some of the districts, notably Vancouver

and Coquitlam, have decided that the gender

section of the current

mathematics assessment test should not be taken by the students,

because it actually not only encourages sexism but encourages people,

especially young women, to regard themselves as perhaps not as

naturally talented in math.

In addition to that, it raises a number of other doubts. The

Coquitlam trustees say that the sexist gender

section is none of the

government's business, and they're not going to do it. Some parents

have asked for the return of the questionnaire, because of invasions of

privacy. I've had some of that myself, so I'd just like to pass it

along and say that I think the tests are an invasion of privacy in many

cases. And they are identifiable; they go through the pretence of

suggesting that, well, the kids don't have to sign these things, but

there are a number of indications about how a person could be

identified. I'll go on with that a little later.

These tests are being given in grades 4, 7 and 11. There are certain

classes of people that are going to be very sensitive about certain

questions on the test under the

section called "student background."

For instance, here are questions 9 and 10: "What was the highest level

of school or college attended by your father or male guardian?" That's

one of them. Take a grade 4 student. I wonder if a grade 4 student

would actually be a reliable person to transmit that information. "What

was the highest level of school or college attended by your mother or

female guardian?"

Here is the list of reasons for studying mathematics, you know. And

there are a great number of other things that I think really are not

suitable to ask young children, especially in view of the kinds of

families that we have now. The assumption is: a nuclear family. Surely

the principle that we should follow is that if you're going to ask

these questions about family situations, at least you should get a

consent form from the parent. You're not getting that now.

I can give you examples of how, on this test, you can actually

identify who the student is along with his parent and the attainment.

What student wants to feel good about admitting that his mother is a

mathematical moron? That is, if his mother is even living in the house.

His mother may well be a mathematical moron, or his father only went to

grade 4 because his grandfather was in grade 5 and the father didn't

want to pass him. There are a number of things here that I think are

really inappropriate to ask students to bring to school. Obviously,

some of them may not even know.

There are other things, as well, that I think we should look into.

The natural parents, or whether or not they have a family which is a

nuclear family with mothers and fathers and sisters and brothers....

Half the kids come from, in many cases, homes in which there isn't a

natural parent in the home, or maybe only one — or there is only one

person in the home.

Then there is all this attitudinal stuff that they're asking about

too, which I, and so many other people too, think is inappropriate — a

lot of the attitudinal stuff about whether you like math or whether you

don't. Then, I think, to throw kids into an emotional turmoil

immediately before they are given the test is inappropriate. A lot of

these questions can trigger that sort of thing.

[ Page 6517 ]

About the identification here, I've given some hint of that, but

just on the attitudinal, on the gender section: "My father enjoys doing

mathematics." Now if I'm a grade 4 student, do I really know whether my

father enjoys doing mathematics or not? "My mother enjoys doing

mathematics." "My father is usually able to help me with my

mathematics." Who wants to admit that his father couldn't help him with

the mathematics? This is easy to satirize, but that doesn't mean it's

funny, or that my intervention is frivolous. It isn't. It's deadly

serious. I think these sections should be withdrawn.

How can you identify these kids, for instance? "What language do you

speak at home?" Well, isn't it very easy to find out, if you're a

recent immigrant from Greece or Hong Kong or Vietnam, which child has

answered this particular question? "What program are you in? Have you

ever passed a grade or accelerated or have you ever had to repeat a

grade?" You have to fill in your age, you have to fill in your gender

and your grade. Well, it's a very, very simple way to identify people

under that. So on the question of sensitivity, reliability and

identification, I think these attitudinal sections on student

background and their gender

section should not be there –– I think they

should be revoked, and I think every school district should take the

right to remove these offending sections.

The teachers' guide has some interesting things too, if I can lay my

hands on it. We have recently had Bill 35, which entitles school boards

to terminate the services of teachers under certain conditions.

DEPUTY SPEAKER: Time.

MR. ROSE: I'll go into that when I'm called again, in the rebuttal section.

[10:45]

MR. VEITCH: Mr. Speaker, the comments on the minister — the

minister is out doing good things for education in the province of

British Columbia. I just thought I'd pass that on to the critic.

Mr. Speaker, I'm very much in favour of the principle of testing. I

think we should always be searching for excellence, no matter in what

area within this province or indeed within this country. We ought not

to always tie people — like they did during the time of war, tie every

ship to the slowest one in the convoy. We should allow people to be

able to move ahead.

However, I do happen to agree with the member. I'm sure what the

hon. member is saying is correct; I haven't had a chance to look at

these tests. I do, in essence, agree with what you're saying. I don't

think it's any darned business of a teacher or anyone else to know what

the highest level of college or university that the parent or guardian

attained. Idiots do not necessarily beget idiots, unless they happen to

be politicians from time to time. I agree with the hon. member that

this, on balance, appears to be an invasion of privacy, and I think

that educators would be a lot better off dealing with educational

matters and dealing on a personal basis with their students, rather

than burdening themselves with paperwork.

When it comes down to mathematics, hon. member, and they ask the

question whether or not the father could help them, I'm glad my

15-year-old son didn't take the test.

As I say, I support the principle of testing in schools there's no

question about that — but I don't support the obvious nonsense that

goes along with the thing that the hon. member has brought to our

attention.

DEPUTY SPEAKER: The Chair recognizes the member for Cowichan-Malahat for almost three minutes.

MRS. WALLACE: Mr. Speaker. I am really pleased that my colleague for.... Is it Maillardville-Coquitlam?

MR. ROSE: Not recently. Coquitlam-Moody.

MRS. WALLACE: We have great trouble with those two ridings.

I'm very pleased he has raised this issue in the House today,

because what he has told us today doesn't really relate to a math test

or a math assessment test; it relates to prying into private family

details. It is absolutely wrong to have children in schools subjected

to that kind of a document and be forced to sit down and reply to that

kind of document. If that sort of information were asked on an

application form for a job, the company that asked it would be in

trouble with the law of this land.

Here we are with a brand new constitution that's supposed to protect

the rights of everyone, and we have this government subjecting small

children to that kind of a form. We're certainly infringing upon the

rights of children — absolutely infringing on the rights of children.

That is a disgrace. I wish the minister were here, and that he would

stand up and tell us that he will remove that from the schools. I'm

shocked. I really am. I had no idea, in spite of the fact that I have

an office just two doors down from my colleague — we're always so busy,

we never have time to talk to each other. But I'm shocked at this.

MR. VEITCH: ...a math test.

MRS. WALLACE: It's not a math test. That is not a math test.

It's not even a math assessment test. That is an assessment of the

family, the background, the very personal details of that family. It's

an infringement on civil liberties; it's an infringement on the

constitution. If it were in any format other than in a school, it would

be an infringement on the law of this province. The minister should be

here to stand up and tell us he will do away with it.

MR. ROSE: What I was about to deal with before my time ran

out earlier was the business of the teachers'

section as well. I was

making the point that now we have a new law, Bill 35, that entitles the

boards to terminate teachers without any regard to seniority. Seniority

is the third after competence and also the certification.

We're concerned that some boards might take an unfair advantage of

it for whatever reason, political work or whatever, and to terminate,

since seniority is no longer a particular protection. But look at the

teachers' section, if you will, please. Remember now, teachers are in

jeopardy.

Here's a question they asked the teachers about on scale S

problem-solving — under the teachers' guide. "My district provides

adequate assistance and resources for teaching problem-solving." Then

it goes through agree, agree to disagree and right through there. Well

now, if your teachers are being rather critical of their district, they

could be vulnerable, couldn't they?

[ Page 6518 ]

AN HON. MEMBER: Nonsense!

MR. ROSE: The parliamentary secretary screws up his face and says nonsense.

"I am satisfied with my teaching of problem-solving." There's

another question. Suppose you say you're not. Does that mean you're

not doing a good job? It's easy to teach problem-solving. Here's another

one: "How many workshops on problem-solving have you attended in the past

year?" You drone — you haven't gone to any and you find problem-solving

difficult? What are the reasons for this test, anyway?

If you take the memorandum from Jerry Mussio, executive director of

the schools programs division, he'll say: "We have told teachers in the

BCTF that these types of questions, background training of teachers,

opinions dealing with curriculum, are used to help shape new curriculum

materials and that is to ensure new materials meet the needs of

teachers and students." That sounds perfectly reasonable until you look

at an intro to the teacher's guide by a man by the name of Art Olson,

coordinator of the learning assessment branch, the man in charge here.

"District and school level results will be sent to your district early

in the school year. At that time superintendents will determine how the

results will be used in your district." That doesn't sound particularly

sinister, unless it has to do with something about teacher termination

and teacher retention.

I think the whole thing is badly thought out. I think a lot of the

questions could be criticized even in the math part, on the grounds

that they ask for recall, they tend to be attitudinal, and they're

really not part of an assessment package that I think is acceptable in

the schools of British Columbia.

MRS. WALLACE: They really need that now that teachers don't have seniority.

MR. ROSE: Well, that's exactly the point that I'm try to

make. So anyway, that's really the concern. I think that a lot of

people are concerned about it, Mr. Speaker, and I think it was

important to bring to the attention.... I hope it will come to the

minister's attention by way of the parliamentary secretary.

AGRICULTURAL LAND RESERVE

MR. KEMPF: Mr. Speaker, on April 18, 1973, legislation was

passed in this House, under the guise of seeking protection for

agricultural land, which since that time has perpetrated untold

hardships on many citizens of this province, particularly northerners.

It has removed their freedom and done irreparable harm to the

development of the northern two-thirds of this province since that time.

Mr. Speaker, this piece of socialist, repressive legislation

masterminded and drafted by the present second member for Vancouver

East (Mr. Williams) — I'm sorry he's not in the House today — is still

in place after 12 years. It's high time something was done about it.

Mr. Speaker, to have such restrictions in place north of the

fifty-first parallel in British Columbia is a travesty. It is — and

I've said it many times inside and out of this House — at least 100

years ahead of its time.

You don't understand the problems of small, rural communities in the northern

part of this province, or you wouldn't laugh, Madam Member.

Mr. Speaker, in our small communities there is no urban sprawl.

There is no development pressure on adjacent agricultural land. There

is no danger of wiping out forever, blacktopping over, or placing in

jeopardy in any way the agricultural land which exists there. In fact,

undeveloped agricultural land is everywhere in the north, and such

regulation north of the fifty-first parallel was never and in all

likelihood will never be necessary. Development in most areas of rural

British Columbia will never, for the next hundred years at least,

present a threat to the well-being of the agricultural community. In

addition many thousands of hectares of land, which will never, ever

make the grade as agricultural land, are frozen within the agricultural

land reserve, causing untold financial hardships to our citizens in the

north and in the rural areas of this province, literally robbing senior

citizens — our pioneers — of a retirement nest-egg which they in many

cases have worked their lives for. It's unacceptable, it's unjust, and

it must be changed.

Not only in this case, but as well due to this ill-conceived

socialist legislation brought in by a government that sought to place

the heavy hand of government on everyone and everything, and did not

believe in private ownership of anything, particularly land.... Because

of this we are literally driving our young people from the land in this

province. We make it impossible for sons and daughters to remain on the

family farm, resulting in a near exodus of those young people from the

agricultural industry.

It's a catastrophe — it's a literal catastrophe — and one which we

all will be sorry for in time. Regional districts are using this

legislation as a crutch, as a tool for their own narrow, short-sighted

and, in some cases, deceitful motives — attempting to direct our

citizens as to where it is they think they should live, what they think

they should develop, and where. It's literally destroying initiative,

using the legislation, I maintain, for what it was designated for in

the first place.

This assembly and this government must act now to rectify this

wrong, this gross blunder, of 12 years ago. An agricultural land

reserve north of the fifty-first parallel has been proven wrong. It has

failed, it is repressive and it must be done away with. Many northern

British Columbians feel as I do and support me in this endeavour. Many

northerners have experienced the hardship created by this legislation.

For some, it's too late; for many, we must act immediately. I call upon

the government to listen to the needs of rural citizens of British

Columbia, to undo what a socialist government did — a socialist

government bent on control. I call upon this government to do away, on

behalf of the rural citizens of this province, with the agricultural

land reserve north of the fifty-first parallel.

[11:00]

[Mr. Strachan in the chair.]

MS. SANFORD: I don't think I've ever heard such a

short-sighted viewpoint expressed in this House before, except on other

occasions by the same member. If that member were acting in the best

interests of his own constituency and his own constituents, he would be

demanding that we ensure that the very limited amount of agricultural

land we have in this province remains within the agricultural land

reserve so we can have food for the very people that he represents.

MR. REID: Isn't that a joke!

[ Page 6519 ]

MS. SANFORD: Well, it's a joke, is it? I would like to know

where those members expect to grow food if in fact there is no

agricultural land left in this province. Only 4 to 5 percent exists in

the entire province. If the land does make the grade, as the member

suggested, then let me tell you it would not be in the agricultural

land reserve, because it's dependent upon the capability, as determined

by agrologists, of that land to produce food. One of the best things

that the government did between 1972 and 1975 was to ensure that the

agricultural land in all parts of this province was included in an

agricultural land reserve. One of the best things — there's no doubt

about it.

That member should be up here saying to his government: "Make sure

that you change the Land Act to eliminate the political interference by

cabinet that's now made available through the changes that were made to

the original act back in 1977." What he should be doing is standing up

here and arguing with his government to ensure that the precious land

that we have that is capable of producing food is not subject to

erosion, is not subject to the degradation that's currently taking

place. The government should be making far more of a priority of

ensuring that the little bit of land that we have is capable of

producing food.

Does that member not know that in areas like California and Florida,

where we rely very heavily on imports, land is being taken out of

production, hectare by hectare? Does he not know that that land down in

California and Florida is becoming so salted and so salinized that it's

no longer capable of producing food in many cases? Where does he think

the food is going to come from, once the Americans have got to the

stage where they don't have spare food to export? They will keep it for

their own people and we in British Columbia will not be able to produce

the food if, in fact, we follow the kind of short-sighted

recommendation that has been made by that member today.

I certainly oppose the statement made by the member.

MR. STUPICH: Mr. Speaker, the member expressed concern for

farmers. I would suggest that even that member would agree that it's

only a small minority of the farmers who stood to gain by the sale of

agricultural land for purposes other than for food production — just

those who happened, by chance, to be next to some development that

society as a whole has allowed or encouraged — perhaps a highway

intersection, perhaps a school being built on that property, something

like that happening. And because the farmland in question is next to

that, it is suddenly more valuable for other purposes. Certainly not

all farmland in the province can be sold today or tomorrow or even next

week for industrial or commercial purposes. It's just the isolated

instances. If that member were really concerned about protecting

farmers, then he would be doing something to strengthen the kind of

legislation that came in in 1973 to help farmers make a living farming,

rather than becoming land developers. If he had the interest of

farmers, that's the position he would be taking.

I would remind that member also, Mr. Speaker, that when the

legislation came in, the implementation of the legislation was left to

the regional district — the local area — and there were public hearings

in every regional district, where maps were available to show which

areas were going to be included in the land reserves and which weren't.

Those public hearings were listened to in his area as well as in the

Richmond area.

HON. MR. NIELSEN: The maps were redrawn.

MR. STUPICH: Yes, there was always the opportunity at each

stage — the Land Commission then took the maps and, to the best of my

knowledge, never included any land that has been left out, except from

those areas of the province where the ranchers, in particular, asked

for further lands to be included. So it was up to the regional

district. The areas were shortened rather than extended after that, and

there was provision in every instance for there to be five-year

development around communities — enough land left for that purpose.

MR. KEMPF: Well, Mr. Speaker, it's quite apparent that the members opposite did not listen to what I said. I would ask them to go back to Hansard

and read what it was I really said in my private member's statement. We

hear members talking about California and we hear members talking about

the regional district. I said the regional district is using this

legislation as a crutch, as they have since 1973, to the detriment of

literally thousands of our citizens out there in the rural areas of

this province.

Interjection.

MR. KEMPF: If you don't know that, Mr. Member for Nanaimo,

you know nothing about the northern two-thirds of British Columbia. You

haven't talked to the people out there — not even your own supporters,

literally dozens of them, who come to me on a weekly basis, pleading

with me to convince government to do something about this repressive

legislation. You haven't listened, and I ask you to go back and read

the statement which I made and think about what it was that was in that

statement. Then maybe you should go to the north, to the area north of

the fifty-first parallel in this province, and speak even to some of

your supporters, who do not support this socialist legislation.

The House in Committee of Supply; Mr. Ree in the chair.

ESTIMATES: MINISTRY OF ENERGY,

MINES AND PETROLEUM RESOURCES

(continued)

On vote 22: minister's office, $184,214.

HON. MR. ROGERS: I would like to just dwell briefly on a

couple of subjects the member for Mackenzie (Mr. Lockstead) brought up

yesterday during the brief period of time we had to address these

estimates. The cost of the Cheekye-Dunsmuir powerline is $840 million.

Like you, I would agree that there were some conflicting statements

about what in fact it was going to cost, especially during my mock

trial at Madeira Park, which was a nice initiation to being a minister

and finding out what it was all about — a little experience in speaking

to the people. But that was the final cost of building that

transmission line. It's also interesting to note that that was the

first transmission line built to carry power to the Island since the

1950s. The last one essentially went from Tsawwassen to Galiano Island,

across Saltspring Island and then to the major part of the Island.

That circuit was in place for almost 20 years. Then there was an increase in demand. There were times on the Island

[ Page 6520 ]

when people had to be curtailed in their electrical

requirements at the industrial end — not in residential, commercial or

hospital uses, or anything like that. The decision to make the

Cheekye-Dunsmuir powerline was based on some projected increases. I

suppose we will probably be well into the next century before the next

line has to be built, and maybe even longer than that.

A power transmission line isn't something you make on a very small,

incremental basis. You have to make them on a major basis. At the

present time we have excess capacity on the Island, and I hope we have

excess capacity until well into the next century, because that's a very

major undertaking. It causes a great deal of grief for all the

communities it goes through, even though this one only transgressed in

a few communities. Anytime you make a power transmission line, you

cause that kind of problem. Nonetheless, it is in place and it is

supplying power to the Island. The Island no longer has to face the

possibility of brownouts.

[Mr. Veitch in the chair.]

The Island is about 30 percent self-sufficient in electrical

generating capacity through hydroelectric facilities at the present

time. Just to dwell on the Cheekye-Dunsmuir powerline for a few

minutes, and have a reflective look at it, if Hydro had been given the

mandate to just supply the Island with power, this would not have been

the number one, pure bottom-of-the-line, dollar choice. That would have

been to build a thermal plant somewhere on the Island and supply it

with coal, and run that kind of a system on the Island. That's not

particularly wise from an environmental, ecological or social point of

view. British Columbia has to be looked at as a whole. While we have

abundant hydroelectric resources, even if it costs extra money to get

those into various parts of the province — and the Island isn't a big

profit centre for B.C. Hydro, certainly not like the lower mainland is

— it still makes good sense to do that. For some particular reason we

don't apply the same kind of logical argument when we look at gas

pipelines — I just thought I'd mention that.

The surplus that we have at B.C. Hydro will only last for a short

period of time. Once that surplus is gone, then let's talk about what

power alternatives there are for the people of the Island. The Island

consumes about 2.5 million barrels of oil a year right now, which could

be and will be replaced when gas is available on the Island. The

projections for the Vancouver Island natural gas pipeline never

included an assumption that the pulp mills would go from wood waste to

natural gas. It was never our assumption that that would happen. In

fact that's not a particularly wise use of an energy resource. It makes

much more sense to use the wood waste. But it does make sense to

replace imported oil, which at the current time is used to fire the

boilers on the Island when it's required, with gas. I just wanted to

point out that those projections were made on that basis.

I think that covers some of the questions you brought up yesterday

during your brief time. I look forward to your next questions.

MR. LOCKSTEAD: I raised a question out of context in a sequence of issues

we wish to discuss with the minister only because of the very limited time we

had last night. But I would ask the minister, since we're on the subject

for a minute.... I don't want to dwell on this too long, but in my view

the appropriate decision was to construct a natural gas pipeline to Vancouver

Island rather than the Cheekye-Dunsmuir powerline. The cost would have been

less; the benefits would have been greater. Electricity on Vancouver Island

would have been used less because people would have converted to natural gas,

and certainly some of the industries as well.

The $840 million cost. In my guesstimate I included the cost of the

distribution lines as well. My estimate was in excess of $1 billion,

and it may or may not have been out. It's difficult for us to get those

kinds of figures; those figures are really not available to me.

In any event, one last item on that. I had this question down for a

different part of the estimates later, but while we're discussing

energy on Vancouver Island perhaps the minister could at some point

bring us up to date on the extent of the exploration work for gas and

oil that is now taking place on Vancouver Island, or that is projected

to take place certainly in the Union Bay and Courtenay area, that whole

central east coast area of Vancouver Island. It's been determined —

according to newspaper accounts; that's the only information I have on

this particular topic — that according to the geological structure of

the area, once exploration work gets seriously underway there's a good

chance that significant amounts of gas and possibly oil may be found in

that area.

Mr. Chairman, I want to start this presentation off this morning by

discussing briefly the state of the mining industry in British

Columbia. I'll try not to be too lengthy. I've accumulated more

information here than I can possibly want, but we'll try to keep it

brief.

[11:15]

Listening to the members across the House over the last several

years, particularly in terms of the mining industry in British

Columbia, you would think the three short years of good NDP government

in the province was responsible for every mining closure in the western

world and for the decrease in the price of metals throughout the

western world. Of course, all of that is nonsense. I'm not going to

refight the 1975 election, but in my short time as debate leader for

our caucus I've had the opportunity of going through a great deal of

material; maybe not as much as I should have, but no human being could

possibly get through the mass of stuff that crosses our desks every

week. But I'd like to remind the minister — well, the government,

because I don't think the minister has been too heavy on this; but

certainly the government side — that as far as I have been able to

determine, not a single operating mine shut down between 1972 and 1975.

I have been told that a couple of mines which did in fact shut down

had nothing to do with the government of the day. It was simply that

they ran out of ore. When mines run out of ore, they shut down. They

have to. What are they going to mine? Granite? In any event, with those

two possible exceptions.... I have no details on those; that's only

been reported to me second-hand. But not one single operating mine in

British Columbia shut down between 1972 and 1975, in spite of the fact

that in 1974 the Japanese, because they had literally millions of tons

of excess copper in reserve, dumped that copper — which they had the

right to do — on world markets. In 1974 the price of copper decreased

dramatically over a very short period of time, from $1.32 per pound to

somewhere in the area of 44 cents to 46 cents per pound, as I recall

the figures.

Members on that side of the House indicated that we were driving the

mining industry out of the province, and I say hogwash. Information

from the industry itself indicates that

[ Page 6521 ]

under this government, 14 of the 29 operating metal

mines in this province have shut down since 1976, most of them between

'82 and '85. Mr. Chairman, 1982 was the worst year on record for the

B.C. mining industry, and 1983 was little better. I agree and I

understand — I anticipate the minister's response — that poor markets

and low prices, particularly in the metal mine sector, were responsible

for mine closures and lower capacity at existing mines. Between 1982

and 1985, 14 mines closed in British Columbia. This meant the loss of

approximately — well, the figure we have here — 2,700 direct jobs. When

I speak with the people in the industry, and I try to meet with them as

frequently as I can, and visit mines as well — I may talk about that

after a while.... Including the indirect jobs, the figure I have here —

and the minister may or may not want to challenge this figure — is that

a total of 12,000 jobs have been lost between 1982 and 1985 because of

mine closures.

HON. MEMBER: How many?

MR. LOCKSTEAD: Twelve thousand. That's the figure for

unemployment. So we have a government that is now talking about

job-creation programs, and has introduced a number of giveaway bills in

this House in order to create jobs. We shall see. We supported most of

those bills. If there is a chance of any of that legislation producing

new jobs in British Columbia, fair enough. But we shall see. I'm rather

dubious about some of that legislation.

Such job losses have disastrous impact on our society and on the

economics of mining towns, which are quite often single-industry towns.

I have been involved on three separate occasions where towns or

communities have been closed down or partially closed down because

mines have closed down or governments have made arbitrary decisions.

Ocean Falls is a good example. That was not a mining town, but the

disastrous impact on the people involved.... You have to have been

there to understand the impact right through the whole community,

involving schools and hospitals and what have you — the lifestyle of

people. In a moment I'm going to give you one or two very short case

histories.

I have a list of all the mines and the number of jobs lost in all

those 14 mines that are shut down. I'm not going to go through that —

read the list — but I can. The minister is as much aware of these

communities as I am. Since having been appointed to this particular

critic's role, I've received a great deal of correspondence. This one

file alone — I'm not going to go through it — deals with the closure of

one mine in particular. I'd like to give the House just a brief case

history of that Highmont mine at Logan Lake, and how people are losing

or have lost their homes and have been displaced.

Highmont mine at Logan Lake opened in 1980 and closed in October,

1984, it says here, due to depressed copper and molybdenum prices.

Workers were originally told there was supposed to be 20 years of work

there. The mine closure was announced in September, 1984, with no prior

notice or consultation on the part of the company, Teck Corp. The mine

formally closed a month later, with 419 employees — I'm reading this,

Mr. Chairman, because I want to be as accurate as I can with the

figures I'm using — thrown out of work. No compensation or layoff

package was offered other than one month's worth of pay after closure

date, as had been written in the collective agreement. Of the 419

laid-off employees, 150 had purchased homes in Logan Lake. A major

concern of workers was the loss of their houses and the money invested

in them. Teck offered forgiveable loans toward meeting mortgage

payments for the first 12 months after the closure, or families could

vacate their houses and turn over responsibility for the mortgage to

Teck. In either case, homeowners in Logan Lake are left with houses

that are basically without value. They have little hope of any return

on their investment.

The impact on unemployment. This mine closure had a dramatic impact

on the unemployment rate in Logan Lake, where most of the Highmont

employees lived. In August, 1984, 80 people were on UIC; in March,

1985, 158 people were on UIC — a 98 percent increase in the number of

people on UIC over a six-month period. The impact of the closure is

also reflected in statistics for the larger Kamloops region, including

Cache Creek, Logan Lake, Ashcroft, Merritt and Kamloops, where the

miners live. In August, there were 8,523 people on UIC in that area; in

March, 1985, 9,163 people. In other words, 640 more people were on UIC

over a six-month period, an 8 percent increase in the number of

unemployed over six months.

I have a long list dealing with that community and the impact on the

people and the morale factor there. New business in some of these

communities.... New business activity in Logan Lake is nonexistent, and

the volume of sales in local grocery and retail stores is drastically

down. Apparently the only businesses which are experiencing increased

customers are the bars. When people have nothing else to do, I guess

they go to the bar.

Here's another short case history, Mr. Chairman, in terms of the

situation in mining in British Columbia. This is coal mining in

southeastern British Columbia. Mines do not always fully close down

when economic conditions deteriorate. They may operate at less than

full capacity, which also results in worker layoffs and severe

repercussions on the single-industry communities. This has been the

case in the coal mining region of southeastern B.C., where contract

cutbacks by our Japanese customers during the past few years have

resulted in worker layoffs and economic instability. I have a few

examples here. For example, the peak size of the labour force for

Westar Mining, formerly B.C. Coal.... The largest coal-mine in the area

was 2,153 people in 1981; in 1982, 200 people were laid off; in 1983,

400 people were laid off because of decreased Japanese demand for coal.

The current size of the labour force is 1,298 — 60 percent of the size

of the workforce some three years ago. I have figures here as well

dealing with layoffs from Crows Nest Resources due to contract

cutbacks. As I said, they have had a dramatic impact on regional

unemployment figures.

The downturn is reflected in housing statistics. In the main mining

community of the region, Sparwood, CMHC reported a rental vacancy rate

of 8 percent for October 1982; by April 1983 this had risen to 24

percent; by October 1983 — and this is an astounding figure — the

vacancy rate had risen to 49 percent. Empty apartments.... I have all

that here, but I don't think....

Anyway, the conclusion: contract cutbacks in the coal industry have also created

the boom-and-bust situation and economic instability in the southeast coal region

of British Columbia. Those are just two short condensed case histories of the

impact of mine closures.

We in our party have quite a comprehensive policy on how to deal

with some of these matters. It's public knowledge. I'm not going to go

through the whole thing here. It's no secret that part of our party

policy is quite idealistic, and perhaps not totally realistic. As a

result, it is my hope — our

[ Page 6522 ]

leader has announced this — that our resource

committee will be travelling the province and talking with the people

in the industry, as I do here in Victoria quite frequently. In fact, I

have had the opportunity of visiting some mines, closed and open, here

in British Columbia over the past several months.

However, one of the prime planks in our policy is this: we believe

that there must be greater communication between mining companies,

workers, the local community and the government. Each of the groups to

be affected must be provided with adequate notification of mine layoffs

or mine expansion, and there must be greater community participation in

these economic decisions which affect their lives. In other words, we

believe that the companies and the government have a responsibility to

the people in those communities and to the people of British Columbia.

Legislation dealing with this type of proposal already exists in a

number of other countries around the world. For example, in Germany,

France and Sweden a review board is established. A company has to file

adequate notice of layoffs and has to disclose the financial position

which necessitates such action. Through community work or in government

participation on the review board, the proposed closure is assessed and

alternatives developed.

[11:30]

As I said before, Mr. Chairman, I was in a situation — it happened

in my riding — in 1976: a major mine closure overnight and several

hundred people thrown out. Many of the people there chose early

retirement and are still there. As a matter of fact, it was very

interesting when I visited Newmont Mines near Princeton less than two

months ago. The company and the union had arranged a tour. The company,

I might add, were very gracious hosts. I was very interested in the

technological changes that have taken place, particularly on the

milling side, since I had been associated with mining in my own riding.

I was, frankly, very impressed and quite shocked. But technological

change does mean fewer employees and more sophisticated types of

equipment — which brings me to another point.

At that particular operation, Mr. Chairman — in examining the

operations of this very sophisticated and improved equipment, and

technological change — with the people who were hosting and guiding

this tour with me, one of the remarks they made really shocked me. The

sophisticated equipment is not constructed here — very little here in

Canada or British Columbia. They buy their equipment from elsewhere: a

lot from West Germany, some from Japan. I would like to know why we are

not encouraging the development and construction of a secondary

industry here to supply our operations with that type of equipment. But

more than that, why should we not be producing this type of equipment

and selling it around the world if we can?

Little Australia has about half the population of Canada. One very

sophisticated type of machine doing a specific job at that particular

mine was manufactured in Australia, of all places. It could easily be

produced here in British Columbia, but they had to go all the way to

Australia to get this particular piece of equipment.

I only have about two minutes left on this segment, so I just want

to get this in very quickly. Dealing with the minister's estimates as I

go through the estimate book, total expenditure for the ministry is

increasing from $23.6 million in 1984-85 to $25.9 million in 1985-86.

Where is the $2 million increase occurring, very quickly? The petroleum

resources division will see an increase in expenditure on professional

services of $1.704 million. What are they doing? Are you hiring

consultants with that extra million? That's a very large increase. What

studies are they doing? The energy resource division will see grants

and contributions which it spends increased from $1,000 in 1984 to

$1,350,000 in 1985-86. The sum has increased by 1.349 times. What is it

doing with these grants and contributions? What's that money for?

What's it going to be used for? Is it connected with the Vancouver

Island gas line? I simply don't know.

I see my time is up, so I'll give the minister a chance to respond.

[Mr. Ree in the chair.]

HON. MR. ROGERS: It may take me a minute just to get the

answers to your last two questions, but perhaps I can discuss the VI

gas situation — getting back to that for a minute. Even if the gas

pipeline had been built prior to the Cheekye-Dunsmuir powerline, there

would still have been a requirement for further electrical circuits. So

a circuit had to be built in any event, and in the longer term gas is

so much cheaper than electricity and so much more competitive that I

still see the need for gas to come to the Island very urgently.

We have had continual exploration for gas on the Island. Right now

there's some seismic work being done mid-Island, gas and oil

exploration. If they are successful in finding one or two wells, or

maybe even ten wells, they will be very much.... They won't actually do

anything with that gas until such time as gas comes to the Island. You

need to have a fairly substantial field before you can convince people

to put in a scrubbing plant and a distribution system. You might have

one single type customer that would be prepared to take the risk in the

field, but if you recall in 1974, I guess, when the Beaver River field

in the extreme north of British Columbia watered in, we lost those

sales to Alberta. Alberta was able to pick up that volume. That's fine

if you're on the mainland and there are alternatives of people that can

supply you with gas, but if this is your single source, you'd want to

have a very good field. There have always been optimists drilling for

oil and gas. I don't like to comment on what the technical side of the

people may think about whether or not it'll work, but I wish them all

the luck in the world. If they're successful in finding oil and gas on

the Island, they will actually need a pipeline here just to be able to

substantiate their particular operations.

You talked about mining. I guess we've talked about this every year

in my estimates, and we go back to whether Leo Nimsick was really all

that good at encouraging people to develop mines, or whether government

policy affected it. That really is an old argument. I don't think that,

since it involves the current expenditure of my estimates.... You made

your statement; you've heard mine before.

But you also said something interesting. You mentioned that the

copper mines in British Columbia had a difficult time because the price

of copper dropped from $1.20 to 45 cents. If you take inflation, copper

is selling for less than that today. That's the big nub of the problem.

We have probably excess capacity worldwide in copper right now,

although inventories are very low. That's the thing that the mining

industry finds promising, but we must look at it not from the point of

view of the U.S. dollar and the Canadian dollar. The Canadian dollar is

very weak vis-a-vis the American dollar, but the American dollar is so

much stronger than the Chilean peso or just about any other currency

that the trading companies are involved

[ Page

6523 ]

in. We have copper coming out of Chile, Zaire,

Zambia and other places. They're delighted with the price. They are

thrilled with this kind of price, because their currency has been

devalued 200 or 300 hundred percent and that presents us with a problem.

So we still have a difficulty. You know, in the United States the

situation is much worse. Their copper producers are virtually all shut

down because of the strength of the American dollar and the cost of

energy, and the two of those things are there. It's interesting that

the energy prices that were offered to the Arizona producers.... They

were offered an 80 percent discount on electricity, but the terms of

reference are that it's immediately interruptible, and they'll give you

20 percent if you want a half-hour. Well, if you've been through

Newmont, then you have some idea of trying to operate any kind of

milling operation with immediate interruption in electrical supplies.

You're not going to last for very long at all.

World prices of gold have also fallen very substantially. Asbestos

continues to give me a problem in this respect. The finest asbestos in

the world is actually mined in Cassiar, because of the length of the

fibre. The major Canadian contribution to the satellite program and the

space shuttle is not the Spar Aerospace arm; it's the asbestos from

Cassiar. But because it's mined in British Columbia, not produced in

Toronto, we don't have a flag on it and it's not featured on every

television series. There's no question that asbestos is a great

product, but the trouble is, we only produce a certain percentage of

long-fibre asbestos. The other stuff is medium- and short-fibre, and

while almost all the wine in the world is filtered through asbestos

filters and almost all the water we drink comes through asbestos pipes,

there is a genuine scare because of asbestosis. Therefore the demand

for the product has gone down. The Johns-Manville Corp. and what I

consider to be some T. Boone Pickens way of getting around their

corporate liability — and it's now affected Lloyd's of London — have

scared a lot of people away from using asbestos. It's still the only

effective way that we know to stop vehicles that are moving. It's still

going to be used in brake pads and all sorts of things. People don't

recognize the fact that it's around them every day, in and around

everything they use. Still we have that problem.

The Highmont mine. I talked about the price of copper. It did have a

very serious impact on Logan Lake. When the company attracted miners

there in the first place, they offered them fairly substantial

discounts in terms of.... The company guaranteed to buy their housing.

Why is Highmont not operating and some of the other mines operating?

Some of them have much easier rock to work in. The grades tend to be

about the same, although some of them have more moly in them than the

others, but the Valley Copper mine has a much easier rock to crush, and

it requires a lot less energy to crush it.

Also, some of the companies did a better job of contracting. Some of

these companies were able to tie up long-term contracts, and while the

spot copper price on the LME may be 58 to 66 cents, some of this copper

is being sold at much higher prices than that. In fact, the Lornex mine

shipped its one-hundredth cargo of copper concentrate about six weeks

ago from North Vancouver to Japan, and I had the honour of representing

the government and the ministry at that time.

In 1980 the Japanese steel production was forecast to be 150 million tonnes

by 1985, and in fact by this year it will be around 110 million tonnes. The

Japanese have asked all of their coal producers to cut back on their production.

They have not singled out one company or another, but they have gone across

the board in their cutbacks, and it's had an effect on all of the metallurgical

coal producers around the world that supply the Japanese mines.

You mentioned the mining equipment. A lot of mining equipment is

made in the province of British Columbia. Australia is a smaller

country, but a much bigger mining-oriented country. It's probably for

that reason.... Between their opal-mining and their uranium-mining and

their copper-mining and their coal-mining, mining is to Australia if

you discount agriculture just for the sake of our debate what forestry

may be to British Columbia. Therefore there tends to be more focus

there on it.

I would encourage British Columbia manufacturers where possible to

either do joint ventures with or compete with.... But I should remind

the member that we export British Columbia mining technology and

equipment. We're successful in doing that, and if the Australians are

more competitive than we are, then it's up to our manufacturers to get

competitive.

We see some possibility of improvements in the molybdenum market,

but again it depends on whether the steelmakers want to continue to use

Russian vanadium, which is also being dumped into the market.

Since 1982 coal production in British Columbia has increased from

10.6 million tonnes to 23 million tonnes in 1985, in spite of cutbacks.

That does reflect in some jobs.

I have the answer, I think, to your grants: $1,350,000 is provided

to grants under the rural gasification program for the Sorrento–Blind

Bay extension to the Inland system. That's the question for that one.

There is an increase of $1,740,000 for the completion of the first-year

maintenance costs of the Desan Lake petroleum road, which is the one I

spoke of yesterday.

We see an increase in gas and oil.... In fact, one of the

difficulties in this ministry is that we depend on really highly

skilled people, and when the economy starts to pick up in coal- and

gas-mining, I'm getting robbed by the federal government and by

industry all the time for the bright people that are in our ministry.

That's just a difficulty we face.

MR. LOCKSTEAD: Mr. Chairman, just a very brief question,

because I know my colleague is just champing at the bit here. I do have

a number of other issues to discuss with you under this portfolio. It

is my understanding — and I forgot to mention this earlier in my

presentation — that there's a possibility of six mines reopening

because of the possible intervention of the commissioner of critical

industries. I just want to remind the mining industry and the minister

that one of the reasons cited by some of these companies which have

closed mines here in British Columbia is that since 1981, I believe —

perhaps 1982, but certainly since 1981 — this government has increased

the water tax by over 1,000 percent. That also affected other

industries. I do have the figures, by the way, for what is paid by one

of the major companies in my riding, MacMillan Bloedel, in the same

regard; but that's another story.

[11:45]

I see now that under proposed legislation — maybe passed by now, for

all I know — the government has the ability to decrease the water tax

licence and also to cut Hydro rates for new mines. If that means that

these four to six mines

[ Page 6524 ]

can possibly reopen and create jobs in British

Columbia, fair enough. But I will vigorously oppose giving these people

those breaks if the breaks do not translate into jobs for people here

in British Columbia. On the other hand, I could support, for a period

of time, a break in water tax licences and Hydro rates for these

operations if it means they can reopen. But I would hope that they give

a good accounting of their costs if they do reopen and hire these

employees. I don't want to see those tax breaks....

MR. CHAIRMAN: Order, please.

MR. LOCKSTEAD: Wait a minute, I'm talking on a very.... Go ahead.

MR. CHAIRMAN: The debate might be more relevant dealing with

a piece of legislation that is before the House, rather than within the

administrative....

MR. LOCKSTEAD: This legislation has been passed, Mr.

Chairman. You were here. The legislation has been passed and given

royal assent. I'm discussing a philosophy of mines reopening and jobs

for people in this province. You must understand that, Mr. Chairman. So

if I may continue uninterrupted....

MR. CHAIRMAN: Order, please, Mr. Member. We have a bill

dealing with electrical discounts, and if that is the subject matter of

your comments....

MR. LOCKSTEAD: No, it's not the subject matter at all. We're talking about mines opening.

MR. CHAIRMAN: Would the member continue on the administrative aspects of the minister's estimates.

MR. LOCKSTEAD: Well, I was just about completed before I was interrupted, Mr. Chairman.

Interjections.

MR. LOCKSTEAD: I resent it when my line of debate is broken

up over a matter which is not an issue before this House at the present

time. We were discussing....

MR. CHAIRMAN: Order, please. Would the member continue with vote 22.

MR. LOCKSTEAD: That's exactly what we're dealing with, Mr. Chairman.

In any event, the crux of my statement here is that I could

personally support these types of tax breaks, but I would like to see

full accountability. I'm saying that I don't want to see these tax

breaks and that cash flow, the profits that may be made by these

companies, going back across the line or to some foreign country. I

want to see that money reinvested here in British Columbia to create

jobs in British Columbia.

HON. MR. ROGERS: I think I can give the member that assurance, because

that's the terms of reference under which the commissioner of critical industries

is operating. I'm told that there are three candidates for reopening for

sure, and maybe more. What's important is that you don't assist one

mine to open up only to shut another one down. We're competing in the world

market, so that's not likely to happen. I don't believe that the employed

of one community have any regrets about somebody else being able to get some

employment. But there are at least three that I know of, partly because of increases

in the prices of metal, and there is going to be full disclosure made on that

to the commissioner of critical industries. That legislation has been passed,

so you know the terms of reference under which that's available. In each

case the mining companies have come to my office to discuss it with me to see

what we can do about it. We're not prepared to take a second look at the

environmental requirements, but at just about everything else that we can. Other

than safety and environment we're trying to assist them in any way we can.

MR. D'ARCY: Before I get into my remarks, which largely look

at fuel prices and energy, I have to refer briefly to something the

minister just said about how we're not in the business of helping some

mines to open up so that others can close down. I hope you've learned

your lesson from northeast coal, Mr. Minister. My gosh, in the

southeastern part of the province Westar Coal alone, which is a BCRIC

company, is at only about 60 percent of its former production and

employment levels since the advent of northeast coal. So it's very

interesting that you would say.... I would agree with you. I hope

that's not what we get into, because the province of B.C. is on the

hook for large amounts of borrowed money so that some mines could open

up and others shut down or reduce their operations.

In any event, I want to discuss the price of energy, especially for

those of us who live in the interior. I hope some of those caterwaulers

on your side of the House, Mr. Minister, who don't have the intestinal

fortitude to get up and defend you and the energy estimates, will do

so, especially those from the interior and the north. I want to talk

about the effect of some of the things that you're intending to do,

through the Govier report and the price of natural gas, to those who

live in the interior and the north. I want to emphasize that I'm

speaking of the Govier report, because that has been tabled in the

House for some time. That report calls for an increase in the price of

natural gas to British Columbia consumers who really depend on it,

especially if they live in the interior or the north, of over 50

percent in constant dollars and over 80 percent in actual dollars

between now and 1990. It's true that the minister may decide to back

off on that a bit, but the proposal in the Govier report calls for

that. I have yet to hear a single Social Credit member from the

interior or the north get up and defend their constituents in that

regard. I hope to hear that, because we not only have a lot of

consumers there, but we also have a lot of businesses and industries

that really depend for their viability on natural gas and natural gas

pricing.

After all, the price has increased over the last three years but not

significantly — 13 to 14 percent, which is roughly in keeping with

inflation. It has certainly increased less than the price of

electricity from B.C. Hydro, and it has probably increased less than

the price of motive fuels, particularly when one takes into account the

regressive taxation which this government and the federal government

put on our motive fuels.

The minister says that one of the things he wants to do through the

Govier royalty system and through the federal-provincial deregulation

agreement, which he was party to, is stimulate drilling activity. It's

kind of interesting that most

[ Page

6525 ]

grade 8 economics students can tell you that if you

want to sell more jelly beans, the thing to do is not necessarily

increase the price. The minister wants to stimulate drilling activity

by finding new export and domestic markets for natural gas. Yet he

tells us that at the same time, in the face of a recession, he wants to

put the price up. I have long said, and so have many other people

inside and outside this House, that we should be using our abundant and

developed energy resources, particularly those which make us unique —

electricity and natural gas — as a lever to give us the competitive

edge against the prairie provinces and against our competitors to the

south and in other Pacific Rim countries. I know the Minister of

Finance (Hon. Mr. Curtis) likes to talk about how our gasoline prices

aren't as high as they are in Prince Edward Island or Newfoundland. I

don't think too many of our businesses compete with businesses in

Prince Edward Island or Newfoundland, but we sure as heck have to

compete with competing industries and businesses in the Prairies, in

the northwestern states and in the Pacific Rim countries, including

Australia and New Zealand. We should be using our resources in that

regard and not simply as milch cows to provide revenue for the

provincial government.

The minister has been prepared to make cut-rate deals for people who

use natural gas as feedstock. One of them is Ocelot in Kitimat. Another

one is one of my constituents — Cominco has a natural gas marketing

deal. I suppose, as far as it goes, these things are all right. What

concerns me is that we're going to move into what I call the northeast

coal marketing syndrome, which has cost this province so dear. We're

getting into a situation in which the minister and the government are

really gung ho to get a massive liquefied natural gas export plant

going somewhere in the province of B.C., whether it be on the lower

mainland, the north coast or Vancouver Island, or wherever. We'll get

into exactly the same marketing morass as we've had with northeast

coal, where investors from British Columbia, whether they be public or

private — it doesn't matter — will be on the hook for the money. That

capital, once it's there, will be captive. You can't dismantle it and

move it somewhere else.

The investors from British Columbia will be on the hook, but the

Japanese will dictate the volumes and the price. It's all very well for

people from the industry and the minister to say, "Oh, we'll get the

world price," but we all know what the world price is if you live on

the Pacific Rim. The world price for liquefied natural gas is the

Japanese price, because they are the only significant buyers. The

Japanese price, what they are prepared to pay, is just as it is for

coal. The price they are prepared to pay is the lowest price they can

get by having a multiplicity of suppliers. They will get as many as

they can. They will establish them in Borneo, Mexico, Venezuela, in

British Columbia and the western States — wherever they can. They want

a multiplicity of sellers. They are the only buyers, and everybody else

puts up the money. We're on contract to provide up to certain volumes —

if they take it — the same way we are with northeast coal; but they

have no requirement to take minimum volumes, nor is there any minimum

price.

That concerns me, if we're going to go in that direction. It really

does concern me, and from the press releases and discussion, I am

concerned that that's exactly what is going to happen to this

incredibly valuable natural resource that we have uniquely in British

Columbia because we are on the Pacific Rim. We have lots of it; it's

developed now. There are many more supplies of natural gas which I feel

are going to be discovered, and we should be using it, as I said, as a

lever to rejoin Canada and rejoin the world in economic growth. We've

been bypassed as everyone else recovers from the recession, and in some

parts of our economy are still in a state of decline.

There are many people from the ministry, sober minds, who say our

best bet, if we want to have a real solid long-term export of natural

gas, is the California market, exactly the same thing as we were

discussing yesterday in legislation, which I won't refer to, regarding

Hydro electric sales. That is our biggest nearby market, and it's the

market that there really is some free enterprise in, because there is

more than one buyer and also a significant growth.

Going back to natural gas pricing in British Columbia, Mr. Chairman,

if the price goes up, as Mr. Govier wanted it to go up, we do, as

Michael Wilson has done, take an incredible amount of money out of the

B.C. retail economy. We make it more expensive to do business in

British Columbia. We make it more expensive to run pulp mills, to run

forest industry operations. We simply make it more expensive to run

large businesses, small businesses, commercial businesses, and we make

it more expensive for people to live here. That means they have less

money to spend on goods and services produced in British Columbia, less

money to save and less money to invest in some hopeful expansion of the

economy that might take place in British Columbia if this government

ever comes to its senses or if they're ever tossed out of office.

Mr. Chairman, I don't want to dwell too long on that subject, but I

do want to reiterate that we must use our plentiful resources in some

way to get our economy restructured and going again. I want to talk

also briefly about British Columbia Hydro. B.C. Hydro is not only one

of the largest corporations in B.C.; it's one of the largest

corporations in Canada, certainly one of the largest utilities.

Mr. Chairman, I discussed yesterday how Hydro revenue, largely taken

out of the British Columbia economy, had to go up last year by $340

million, or 22 percent, simply to meet the interest requirements that

largely came into effect due to the capital expenditures on Revelstoke

Dam and Cheekye-Dunsmuir hitting Hydro as an ongoing cost all of a

sudden. No doubt that had a repressive effect on recovery in British

Columbia.

But I want to talk about the actual operations of B.C. Hydro for

just a moment. I have taken pride in the B.C. Hydro system, as I think

most members of the House have here. It has been in the past, and I

suppose technically may be, if not one of the best, perhaps even the

best system in the entire world. It's the most modern in terms of

generating facilities, the most modern in terms of switching

facilities, the most modern in terms of forecasting and handling the

incredibly complex runoff situation which you have in different rivers

and different reservoirs throughout the province because of the strange

weather patterns we have in B.C., and also one of the best and most

modern distribution systems anywhere in the world, particularly when

you consider the crazy weather and terrain that we have in British

Columbia, and topography as well — rivers, straits and so forth.

[12:00]

[Mr. Strachan in the chair.]

But you know, internally, going back to last summer, initially Hydro

had an outside consultant, an outside businessman, have a look at what

was happening to their ability to guarantee a safe natural gas product

to their retail customers

[ Page 6526 ]

on the lower mainland, and I suppose to a lesser extent here in Victoria.

They put some red lights on. They sent up some alarm bells at that

time. I raised this in question period a month and a half ago — you

weren't here, Mr. Minister — to your understudy from Surrey. While she

said in the same breath that she was delighted to have been asked a

question, she also took it as notice without stopping for a pause.

Evidently she's not had the opportunity in the intervening six weeks to

talk to you. But in any event, that report at that time was very

critical not only of the reductions which had taken place in the

numbers of maintenance personnel in the natural gas system but also of

the intention of B.C. Hydro to make further reductions.

I'll quote just very briefly; I don't want to read the whole report.

I'm sure the minister has it anyway. It said: "Further reductions in

personnel may be viewed as the deliberate withholding of certain vital

services, which may have serious ultimate consequences for public

safety. Natural gas is classified as a hazardous commodity, and in

today's society, too lean an operating corps would not be acceptable

and might be perceived as negligent." Since this private sector report

was made, there have been some 50 more employees cashiered from the gas

division of B.C. Hydro.

Similarly, Mr. Chairman, in January of this year, internally once

again, Hydro looked at the electrical distribution system, and they

noted the fact that there had been very large cuts in maintenance and

personnel due to economic restraint, which this government has not only

imposed on itself but also on Crown corporations. I have no statistical

evidence that there has been an increase in the frequency or length of

outages throughout the system. I hope there hasn't been. There may

have, but this internal document this spring says in conclusion,

referring to the economic restraint measures imposed on them by the

government here in Victoria: "As a result, electrical operations will

be required to serve loads with reduced reliability, increased

probability of temporary overload during peak periods and increased

risk of equipment failure. These deferrals result in increased

expenditures toward the end of the period to restore reliability

standards as restraint objectives are eased."

What that really says is that not only is it going to reduce the

reliability of the system, and hence the confidence that business and

consumers have in the system, but it also isn't really going to save

much money, Mr. Chairman. Ultimately there's going to be increased

expenditures over what would have had to be done, had things been kept

up, as the utility has done so well over its 20-odd year history.

So I raise these points publicly with the minister and ask that he

use his influence — I think you are one of the directors of Hydro — to

make sure that the hydro electric distribution and operating system and

the natural gas distribution system not only be safe and reliable for

the public but also that it be the kind of system that all of us in

British Columbia can have confidence in seeing maintained, considering

the $8 billion investment which we all have in that system.

HON. MR. ROGERS: Mr. Chairman, let's talk about the price of

gas for a little bit. The sale of natural gas has always been, until

last year, subsidized in British Columbia by the revenue from export

sales. It was selling as low as 33 percent of the price of oil at one

time. With the present marketing situation we have, gas is around 42

percent to 43 percent of the price of oil, depending on where the price

of oil happens to be, because it does fluctuate. Gas sells at about 30

percent of the equivalent of the price of electricity. That's the

situation we find ourselves in.

In the last year there were 40 wells drilled in British Columbia by

gas producers. That's not sufficient for our purposes in terms of even

proving up the gas we need to replace. We maintain a 25-year reservoir

of gas, as opposed to a seven-year reservoir which is maintained by

most of the American states, and we also maintain it to a much higher

standard than they do because they had deliverability problems last

Christmas when it was extremely cold.

I'd like to see the price of gas get up so that the gas producers

find it attractive to drill in British Columbia. That doesn't mean that

we have to take the price of gas up to outrageous levels, but gas

should not be a subsidized product in this province for anybody. I

don't think we have to have anything like the kinds of returns that

they receive in others parts of the world, but even if we went to 65

percent of the price of oil, producers would be receiving less in

British Columbia than they are in Alberta. It costs more to drill here,

and we give them less return here. It's a competitive world. We have to

expect people to come and invest their money in the oil and gas sector,

and you're not going to get that if it's not an attractive place to

invest in Canada.

So that's one of the reasons why we want to look at increasing the

price of gas. As the oil price collapses, maybe that 65 percent target

won't be there, but the gap between the price of gas and the price of

oil and the price of electricity will always be very substantial.

There's just no question in my mind about that.

I want to talk to you a little bit about the LNG project. The LNG

project would see $2 billion worth of investment in this province, 80

percent of it by the Japanese. So they have, if they were to make this

investment — if we were to go ahead — 80 percent of the money sunk as

capital, the very capital you refer to as sunk in the ground in British

Columbia. They're not going to walk away from that investment any more

than you would walk away from an 80 percent investment.

There are other countries that are interested in buying our LNG. I

have been approached by people from the Republic of China — I should

correct that; the Republic of China, not the People's Republic of

China; in other words, Taiwan — and South Korea, both of which have

asked about the possibilities of buying LNG from this project. That's a

commercial transaction which must take place between Canada LNG Corp.

and the various buyers, and there are some political difficulties with

doing that because of their own internal problems, but nonetheless, the

LNG project will not go ahead unless Mobil Oil, Westcoast Transmission,

Petro-Canada and the others can successfully negotiate a 100 percent

take-or-pay contract with the Japanese on this gas, and they're

convinced that the price is right and that they can do it. Under our

gas marketing situation, they become eligible buyers and they pay a

royalty to the Crown, but, you know, it will be the gas producers that

decide whether or not they want to commit their gas. You're quite

right: some of the producers don't think the LNG project is a good

thing. They'd like to sell their gas to California for EOR — enhanced

oil recovery — and that may very well be the case. If the proponents of

the gas project aren't able to contract enough gas in British

Columbia.... We're only allowing them 50 percent of the gas anyway. If

they're not able to either produce it themselves.... After all,

Petro-Canada is the largest producer

[ Page 6527 ]

of gas in the province, in any event. If they're

unable to do that, they've got themselves a real problem. They've got

to go out and convince the Chevrons and all of the other people that

have gas in B.C. to sell gas to them at the kind of price they need to

make this thing work.

Chevron, for example, is a very firm believer that gas should be

used for enhanced oil recovery in California; in other words, used for

making steam for reinjecting into the wells in that state. And that may

very well be the case. But I can't look at the possibility of not

trying to encourage $2 billion worth of construction in this province,

if that's a possibility.

I'm told that we will know within 60 days. We've put all sorts of

time lines on this project. This thing was supposed to have died last

November. It was extended till January 31; then the Japanese froze the

clock, and they said it was still 1984 in terms of this project. Now

the thing is back on track. We will know whether it's a go or a no-go.

The negotiations go on. I get a bi-weekly briefing from the proponents

as to where the thing is going. Alberta has issued an energy-removal

certificate. They are prepared to commit 50 percent of the gas. The

majority of the benefits of this project revert to British Columbia;

that's where the construction will take place.

I can understand your philosophical differences with us on this

particular issue, but I don't think you have to have the concern you

enunciate. The LNG project would require 200 new wells to be drilled in

B.C. every year; that's quite intensive in terms of job creation, as

far as I'm concerned.

B.C. Hydro, I believe, is the fourth-largest company in Canada. It's

the largest company west of Toronto. You're right: with the rolling in

of the Cheekye-Dunsmuir line and the Revelstoke line from being part of

their construction project, they could no longer capitalize expenses;

they had to be put into their cost base. Hydro had to adjust for that

in their accounting procedures.

I share your remarks about the system engineering and the

construction, and the way Hydro is run. I'm not so sure that we're

necessarily the first in the world, and I'm not so sure that we want to

be, because as technology changes, if we always had to have the latest

gadget, we'd have even more expenses. There have been some changes at

Hydro, as we have gone from being an operating company and a

construction company to more of just an operating company, certainly

for the time being, because we don't see any major new projects on the

drawing board right now.

I want to tell you that you asked the question of my parliamentary

secretary; I took the question as notice. Two days later, I believe, I

asked leave to file the answer in the House, because it was a rather

technical answer, and that answer has been filed in the House. You may

find it in Orders of the Day or in the proper documentation where the

questions are. We did communicate right away. In fact, that question

was there. I think it's just probably an oversight.

I don't think there's a problem with system reliability. I don't

think I've had a single complaint about system reliability or the

distribution system. I can tell you right now: that's not the area that

the executives of Hydro are looking at in terms of where we have

difficulties with the company. Where we have difficulties with the

company is at the top end — probably a few too many officers and not

enough enlisted men. That's what's being looked at.

You made some complimentary remarks about the forecasting

department. The forecasting department, in terms of how we handle our

entire water distribution system, is recognized worldwide. In fact, the

shortage of rain in the Bonneville administration's water area in the

last two weeks and the fact that they are required, under some new

federal legislation in the States, to give priority to flooding,

fisheries, agriculture and power generation.... From a water management

point of view, that is a conundrum that just creates all sorts of

nightmares for them, and that's why we've been able to actually benefit

in terms of some export sales. I think that answers the questions you

brought up. You'll have more, undoubtedly.

MRS. JOHNSTON: May I ask leave to make an introduction?

Leave granted.

MRS. JOHNSTON: We have some very special visitors in the

House with us today. I would ask the members to please welcome Mrs.

Bradley, Mrs. Witty and the No. 24 Surrey Girl Guides company visiting

us from Surrey.

MR. D'ARCY: I'd like to advise the minister and the House

that he mentioned that we have some philosophical differences. In the

matters we're discussing here, the only philosophical differences we

have between he and his government are the differences between doing

good and responsible business on behalf of the people of B.C. and doing

bad and irresponsible business on behalf of the people of B.C. But the

concerns we have about the LNG project are not the glowing projections

that the minister gives us, because we heard those same glowing

projections about northeast coal; we want some solid facts. If what the

minister says is all correct or comes to be true, more power to him;

that would be wonderful. My concern is that we're going to go the other

way, because I think we're dealing with some pretty smart bargainers

when we get into international energy deals. We have not been well

served, and not only by negotiators on behalf of governments; we have

not been well served by negotiators on behalf of big business, either.

They've been taken to the cleaners as well on some of these deals.

[12:15]

It's all very well to say, as government people do: "Oh well, it's

their money. Let them throw it away." The problem is that large

corporations have a way of recouping losses from Joe Blow and Jane Doe

when they lose money. Just look at the banks. When they give bad loans

to Venezuela, or wherever the heck they do, they get it out of the

small businessman and the small borrower. So it's not their money to

throw away. As many people have said, it's not just governments who

have no money of their own; corporations don't have any money of their

own either. They only have shareholders' money and customers' money.

They get up what they lose one way or another.

In any event, let's talk about investment in British Columbia that

might be forthcoming. I'm talking about the federal-provincial energy

agreement. It would have been nice if we had seen some reduction in

prices of natural gas or motive fuels because of this. We did see a —

what was it? — 0.6 cent or 0.7 cent reduction recently. But that was

because the feds removed one of their taxes, and the province didn't

move fast enough to grab that money for themselves. They didn't amend

the legislation fast enough. That's probably the only reason we saw a

reduction in motive fuel prices. We know

[ Page 6528 ]

that when the feds backed off from one of their

natural gas taxes, my good friend over there, the minister, moved in

immediately to get that money. There was no reduction to the people of

B.C. when Ottawa quit collecting that ridiculous tax. We just had

another ridiculous tax added on in British Columbia.

So what's going to happen out of this agreement? It's kind of like

Michael Wilson's budget: it's kind of an a-wing-and-a-prayer thing.

It's trickle-down personified. I hope I'm not being too crude here, but

many people have talked about the trickle-down idea as being, well, if

you give the elephant enough peanuts maybe a few will make it through

undigested. In any event, what have we got here about estimates? These

aren't our estimates or political estimates; these are private sector

estimates of what that agreement is going to mean, in 1985 alone, to

the four major oil companies in Canada. The four major oil companies in

Canada happen to be Gulf, Imperial, Shell and Texaco; nobody should be

surprised at that, I don't think. They're going to make an additional

after-tax revenue of $230 million out of the agreement. That's not

gross revenue; that's after-tax revenue of $230 million — after all

provincial and federal taxes. It would be wonderful if they invested

that in Canada, and a large amount in British Columbia. But we don't

know that it's going to be invested in Canada, or even if any of it is,

and we don't know how much is going to be invested in British Columbia.

Now Canadian oil companies — their four largest ones are going to

make about half that much extra. I'm willing to bet that most if not

all of that extra $120 million is going to be invested in B.C. One of

the reasons for that is not just that they're Canadian companies, but,

as I'm sure the minister knows, Canadian oil companies are the people

who are developing, lately, most of the new oil. The foreign

multinationals are the companies who have control of most of the old

oil. When you can pump that up with deregulation every time you operate

your pump, it's a licence to print money, as the figures I gave you

have shown. But the Canadian people don't have too much old oil. They

have new oil, and they turn their money around pretty fast. They take

risks. I hope that the foreign companies join them, quite frankly. But

history hasn't shown that.

In any event, I guess we could talk at great length about what the

future might hold, or what certain things might happen hypothetically,

Mr. Chairman. I'm just standing here expressing my concerns that the

benefits to western Canada, and to British Columbia in particular, may

not be nearly as wonderful as the federal minister and our provincial

ministers say they're going to be. My overriding concern is that none

of these changes as yet have resulted in a decrease in prices. They may

at some point. At least there have not been increases in prices, but

I'm sure the minister knows that ever since the provinces and Ottawa

got into the business of periodically coming up with energy agreements,

while most of the public have never really fully understood the

implications of those agreements, there is one thing that everybody

understood and that is that every time an agreement was announced,

immediately, if not sooner, the price went up at the gas pump. The

price of natural gas piped into peoples' homes went up too.

If there's one thing wrong with the way we do business in British

Columbia, it's that we pay too much for our motive fuels, we pay too

much for our natural gas, and we pay too much for our electricity. I

don't hear the minister saying there's anything wrong with the 13

percent sales tax on gravity that people pay when they pay their hydro

bills. I don't hear any of the people on his side of the House saying

that the people in their riding shouldn't be paying that because it's a

disincentive to modernization, to expansion of industry and to

commercial operations, and indeed takes a good deal of revenue out of

the retail economy of British Columbia.

So we have not talked a great deal about the actual effect in this

House of that federal-provincial agreement, and I am interested to hear

the minister's feeling on it. I know he was quite enthusiastic, and

probably still is, about that agreement when it took place. But our

primary concern on this side of the House is not only that there be

increased activity in the exploration and production of natural gas and

hopefully petroleum in the province of B.C. but, most importantly, that

the price to the consumer will cease to go up and hopefully come down.

MR. DAVIS: Briefly, Mr. Chairman, a subject which is rarely

raised in this House: the number-crunchers in Ottawa concerning

themselves with the redistribution of income across Canada have been

looking increasingly at resource benefits — the benefit or value to the

people of the province of a given resource, let's say an energy

resource, as opposed to the cost as expressed in rates. In British

Columbia, the principal energy area in which there is a benefit over

cost is hydro. If we had to use an alternate source or series of

sources to generate our electricity, the power would undoubtedly cost

us more. If we had to use money and use the financing which you and I,

Mr. Chairman, normally encounter, as opposed to private financing and

tax avoidance by some of our publicly owned utilities, the costs, the

rates and the prices would be higher.

Now we're somewhat familiar with the concern that Ottawa expressed

about the revenues that Alberta obtained as a result of the oil boom of

the seventies. Their difficulty in trying to translate this into a

benefit which they could then spread across Canada diminished the net

income to Alberta and increased the net income of all other provinces.

Nowadays there seems to be an increasing interest in all resources — an

evaluation by federal economists as to what the alternate cost would be

in each province of providing sources of energy in equal amounts and

assessing therefore what the net benefit to the citizens of the

province is.

In other words, if they have unique resources, they have a unique

benefit, and that unique benefit should be credited to them. Therefore

they're better off than they allege, and therefore the money they

receive from Ottawa in redistribution or equalization grants — whatever

— is reduced. I trust that in the Energy ministry someone is looking at

these numbers that several federal departments, and particularly the

federal department of finance, have been publishing in this regard.

They've certainly commissioned studies. The Economic Council of Canada

has commissioned studies; even the Science Council of Canada has. I

feel uncomfortable about their conclusions. They say, for example, that

British Columbia is enjoying a substantial net benefit — hundreds of

millions of dollars net benefit — as a result of its hydro. The

alternatives would have cost more and therefore British Columbia is

richer; therefore British Columbia doesn't want the same redistribution

of wealth across the country as it might otherwise want if you ignored

the resource development area, particularly energy.

[ Page 6529 ]

I merely raise this subject because it is, I think, a matter of

concern. It has to be a matter of concern to the Minister of Finance

when he's entering into negotiations for the next round, the next

five-year revenue transfer agreements between Ottawa and the provinces.

I think the ministry ideally equipped to do this kind of analysis and

to counter federal claims, at least in terms of guesstimates, is the

Ministry of Energy, Mines and Petroleum Resources. Mine is merely a

comment and a recommendation, but I think it's important if we look

ahead a few years.

HON. MR. ROGERS: I thank the member for North

Vancouver–Seymour for those remarks, and I will look into that. I think

perhaps it's something that should be done jointly between this

ministry and the Ministry of Finance, rather than just this ministry. I

would have difficulty quantifying those kinds of values, and I think

anybody given that challenge would have that possibility.

The question you raised was answered on May 16. That's the question that was put on the order paper. I just bring up that point.

We talk about LNG. The number one LNG producer in the world is

Indonesia, and the operator of the field in Indonesia is Mobil Oil.

They're the number one suppliers to the Japanese. It is the most

profitable division of Mobil Oil. I have to assume that they're not

stupid when it comes to doing international trading. I don't believe

that Petro-Canada doesn't have in its arsenal pretty intelligent people

when it comes to doing business with the Japanese. From the Japanese

point of view, it's quite clear: they're in the position of having at

any one time a total of about seven or eight days' worth of fuel in the

country — that's all they've got — so they're going to make the effort

to diversify to many different sources around the world.

We have to make the decision whether — this has to be a commercial

decision — that's the best use of the gas or whether the best use of

the gas is to hold it, to have it go south of the border. That's up to

the producers of the gas to make that decision. I think it's a good

thing to have more than one customer for British Columbia. We could

have increased activity in the United States, more discoveries in the

United States. The gas bubble in the United States has turned out to be

a bit of a sausage. It never seems to go away. There were more wells

drilled last year. They've proven up all the gas that they used last

year and then some. People come to see me and tell me the New Mexico

fields are about to fail, and we're going to pick up all of El Paso's

business. But El Paso doesn't tell me that, and others don't tell me

that.

PG&E, which is the world's largest utility, buys a lot of gas

from Canada and would like to buy more, would like to contract more. I

can see both of those markets coming into effect, but the producers

have to be approached by those two people as well and decide which way

to go.

The western accord does away with the petroleum gas royalty tax and

a number of other taxes. I guess if you want to see whether it has any

benefit, you have to go to Fort St. John or Fort Nelson and see the

rigs that are coming back from the United States, see the amount of

effort that is going on. You're right that the Canadian companies —

especially Canadian Hunter, probably the most aggressive of all....

Jim Gray is really optimistic now and is now prepared to go and get

heavily into debt and start drilling for gas in British Columbia

because he's convinced, as others are, that the Elmworth field, which

stops right at the Alberta border.... All the drilling seems to be

on the Alberta side of this basin, because it wasn't attractive to do

it in B.C. He's now convinced it will be, with the changes we've made

and the changes in the western accord. So we're going to see some very

exciting developments taking place there — at least exciting from my

perspective.

I was in Fort St. John when the oil boom was on in British Columbia

before the national energy program was brought into place. I don't

think that kind of boom is particularly healthy, but I've also been

there several times since, and the result is even less healthy. It's

just as devastating for that community as the results of collapsed

mining ventures have been in single-industry towns. While Fort St. John

is not a single-industry town, oil and gas certainly are a major part

of it. You will see greater activity. I have written to every oil

producer in the province asking them what this will mean in terms of

their activity. I've been to Calgary and talked to most of the majors.

Each one of them assures me that they will be having an expanded

drilling program in British Columbia as a result of the western accord.

Miss Carney made it very clear when we signed this document that

unless there was some activity, we collectively — and all of us, all

the ministers involved, agreed with this — would see to making other

changes in this accord, or to finding some other punitive action if in

fact the industry didn't respond as they said they would. So far, every

indication I have indicates they are responding and then some. In fact,

as land sales go on and you receive the announcements of our land

sales, you'll start to see increased interest in this particular area.

So I've written to every company. Each one of them has responded

very positively to this. Each one of them has given me a rough outline

of the kind of drilling they expect to do in B.C. I think it's a

positive thing.

[12:30]

You talk about oil prices and petroleum prices. Remember that in

Canada, under the national energy program of the previous government,

we had shielded the Canadian consumer from world energy prices. We had

pretended that somehow they didn't apply to Canada, and collected tax

in one pocket which we used to subsidize gas in another one. It turned

out to be a very expensive process. This year we have had the world oil

price come down and the Canadian oil price come up to the point where

the two meet, and in fact we've moved to world energy prices without

having to go through a major upswing in the price of petroleum

products. I think that's a healthy thing to do because Canada is not an

isolated nation, and it's not a nation that's totally self-sufficient

in oil and gas, and we might as well face that reality.

I might also tell you, of course, that some of the taxes that were

imposed by the national energy program were to buy companies like

Petro-Canada. I don't think it was a particularly good idea. I know you

think it's a good idea, or your party does. Maybe yes, maybe no. I'll

tell you one thing, when you visit their offices in Calgary you find

out what opulence means, because they sure put all the big companies to

shame — absolutely. There's nobody that dines as high on the hog as

Petro-Canada does. I invite you, if you're in Calgary, to just go into

the foyer. You don't even have to go upstairs. It gets worse when you

go upstairs. Anyway, that's the reality of what we have. We now have a

national oil company. They are the biggest gas-producers in the

province of British Columbia. If we're successful with these

negotiations with the Japanese, then they will be a major player in the

[ Page 6530 ]

LNG project. I think that their board of directors and their mandate

given to them by the federal government means that they're responsible

to Canadians just as well as they are to British Columbians — as we're

all Canadians — and I wouldn't think that they're prepared to give away

their reserves or make foolish decisions which would see the oil and

gas which they've in most cases bought in British Columbia, rather than

found, given away at rock bottom prices. I think that answers some of

your questions.

MR. D'ARCY: Mr. Chairman, I don't want to pre-empt other

members, but I just want to comment on wha